A bigger slice for GM in '95?

Just wait, says G. Richard Wagoner Jr., General Motors Corp.'s North American Operations will improve its North American market share in 1995.GM has taken about 33% of the light-vehicle market for the past several years, but feels that with vehicle sales hovering around 15.6 million this year it can take more market share. That means GM can ill afford any production blips, so it must improve its relationship

Feb 01, 1995

Just wait, says G. Richard Wagoner Jr., General Motors Corp.'s North American Operations will improve its North American market share in 1995.

GM has taken about 33% of the light-vehicle market for the past several years, but feels that with vehicle sales hovering around 15.6 million this year it can take more market share. That means GM can ill afford any production blips, so it must improve its relationship with the UAW.

Plagued with strikes, and the threat of strikes, GM vows it will not handle union relations as it has in the past. That doesn't mean the automaker plans to bend over backwards on UAW demands. There must be a solid business case for those issues, and they must allow GM to stay competitive. What it does mean is that GM hopes to create a better partnership with the union.

There have been six walkouts at GM in the last year. More are sure to come while the giant automaker and its union try to find some common ground as GM desperately needs to be more flexible and the UAW needs more members. Its rolls have fallen from 1.5 million at the end of the 1970s to about 800,000 today. "On one hand you have an enormous, struggling corporation -- its back to the wall -- finally seeking to change and adapt to the future," Mr. Wagoner, NAO president, says during a speech before the Automotive News World Congress. "On the other hand, you have a strong union with a proud and accomplished heritage, also faced with a changing future." Today industrial workers account for less than one-fifth of the workforce -- about the same as they did in 1900.

Those critical issues automatically put the two sides at odds, but Mr. Wagoner says they'll work together to solve the problem. "If we don't, it could be a high cost for both of us," he says.

"We are like two huge bears. We can give each other a bear hug and take each other down."

During his remarks Mr. Wagoner lists this and several other lessons the automaker must learn before NAO and GM can be permanently healthy. Among them: avoid management fads and instead use common sense to change; become more flexible; and improve internal and external communication.

Things are looking up. GM made $2.5 billion in 1993 but NAO was unprofitable on a net income basis. Although he promises NAO will be profitable in 1994, and there will be small profit-sharing checks for UAW members, Mr. Wagoner admits the results don't match expectations. However, he says "we are on track for North America. We are going to break even this year even with a $750 million onetime charge (for retiree benefits). I don't call that falling behind."

As for executive bonuses this year, "that's a call for the board," he says.

The outlook for '95: "Expect to see big improvements, but nowhere in terms of what we need."